Did Anyone Predict The Economic Bust AND The Boom?

There’s been a big brouhaha in recent weeks over who actually
predicted the financial crisis and whether it matters. I
think maybe we’re asking the wrong question though. The
reason is simple – we’re being biased towards one narrow part of
the business cycle.

One thing you’ll find among those who claim to have predicted the
crisis is that a lot of them are perennial bears. I often
cite Wynne Godley for predicting the financial crisis in the USA
and the Euro crisis, but Godley was famously bearish throughout
his life. And that tends to be the case with many of the
economists who “predicted” the crisis. You find that many
of them were bearish for years or even decades before the crisis
and then when the storm hit they were lauded for their
forecasting capabilities. A classic case is someone like
Peter Schiff who seems to always be negative about
something in the USA so when something finally goes
wrong he tends to have his hands in some part of the “forecasted”
disaster. It’s the old “stopped clock” thing…

Now, I should add that the main reason I love Godley’s
predictions is because he clearly explained WHY the crisis would
occur. That is, he understood, at an operational level, why
something was wrong with the US economy and the Euro system.
He wasn’t just screaming fire in a crowded theater for 20
years straight. He was explaining precisely why there was a
high risk of fire in the first place and showing us precisely why
the theater was so dangerous. Most of the predictors of the
crisis were just towing the party line or saying the same thing
they’d been saying for a long time (like, debt is unstable,
government is bad, the Fed is a ponzi scheme, etc). But
maybe we focus on one part of the business cycle too much.
After all, a great trader doesn’t make money just because
he makes a great prediction in one direction. He must also
be smart enough to know when the odds have changed and now favor
cashing out. So maybe the better question is, who predicted
the crisis AND the ensuing recovery? In other words, who
predicted the entire cycle instead of just the part that gets all
the media attention? Isn’t that a better display of real
skill in forecasting?

So the more important question here might not be who predicted
the bust, but who ALSO predicted the boom afterwards? Okay,
“boom” might be a bit of an overstatement, but there’s certainly
been at least some recovery. There’s
definitely been a huge recovery in most assets, but I know we can
debate the strength of the recovery. Anyhow, is there
anyone who was extremely bearish heading into the downturn who
was also prescient enough to predict that the world wasn’t ending
and that we might actually be on the verge of a big turnaround
when things looked so terrible in 2009/10?

Honestly, I can’t think of anyone off the top of my head who did
this so I wanted to throw it out there to you guys. Did
anyone predict the bust AND the boom?